Kurtenbach v. Frito-Lay

1997 SD 66, 563 N.W.2d 869, 1997 S.D. LEXIS 67

• Court: South Dakota Supreme Court
• Decided: June 4, 1997
• Docket: None
• Status: Published

Opinions

MILLER, Chief Justice

(on reassignment).

[¶ 1.] Employer appeals Department of Labor’s award of rehabilitation benefits to Claimant for a five and one-half year collegiate metallurgical engineering program. By notice of review, Claimant appeals the circuit court’s denial of benefits during the time prior to petitioning the Department of Labor for rehabilitation benefits as well as the denial of Cozine benefits. We reverse in part and remand in part.

FACTS

[¶ 2.] Roger Kurtenbach was employed as a route salesperson with Frito-Lay (Employer) for approximately thirteen years when he suffered a work-related back injury in August of 1991. At the time of the injury, he was earning nearly $40,000 per year. Following surgery and physical therapy, he attempted to return to work but was unable to perform his normal duties. The parties do not dispute that Kurtenbach’s injury prevented him from returning to his position as a route salesperson for Employer.

[¶ 3.] On January 13, 1993, Kurtenbach enrolled in a civil engineering program at South Dakota School of Mines & Technology (SDSM & T). He later changed his major to metallurgical engineering.¹ He did not contact Employer about receiving rehabilitation benefits until January 23, 1993, after his enrollment in the program. Kurtenbach’s claim was denied by Employer, prompting Kurtenbach to petition the Department of Labor (Department) for rehabilitation benefits.

[¶ 4.] Following a February 9, 1995, hearing, Department concluded that the five and one-half year metallurgical engineering program was a necessary and reasonable means of restoring Kurtenbach to suitable employment and that he was entitled to rehabilitation benefits for the duration of the program. Department also held that his petition for rehabilitation benefits was timely filed, but denied his request for Cozine benefits.

[¶ 5.] Employer appealed to the circuit court. Department’s decision was affirmed in its entirety except the circuit court reversed the award of benefits for the period between Kurtenbach’s enrollment at SDSM & T in January, 1993, and his petition to Department in August, 1993. This appeal followed.

STANDARD OF REVIEW

[¶ 6.] Our review of administrative appeals is well-settled:

We will overrule an agency’s findings of fact only when they are clearly erroneous. The question is not whether there is substantial evidence contrary to the agency finding, but whether there is substantial evidence to support the agency finding. In other words, even if there is evidence in the record which tends to contradict the Department’s factual determination, so long as there is some substantial evidence in the record which supports the Department’s determination, this court will affirm. Great weight is given to the findings made and inferences drawn by an agency on questions of fact. Conclusions of law are given no deference and are fully reviewable. When reviewing evidence presented by deposition, we do not apply the clearly erroneous standard but review that testimony as though presented here for the first time.

Hendrix v. Graham Tire Co., 520 N.W.2d 876, 879 (S.D.1994) (citations and internal quotations omitted). We review an administrative agency’s decision without any presumption that the circuit court’s decision was correct. Nilson v. Clay County, 534 N.W.2d 598, 600 (S.D.1995).

[¶ 7.] I. Whether the award of rehabilitation benefits was clearly erroneous.

[¶ 8.] The workers’ compensation statutes allow a claimant to receive compensation during rehabilitation:

If an employee suffers disablement as defined by subdivision 62-8-1(3) or an injury and is unable to return to his usual and customary line of employment, the employee shall receive compensation at the rate provided by § 62-4-3 up to sixty days from the finding of an ascertainable loss if the employee is actively preparing to engage in a program of rehabilitation. Moreover, once such employee is engaged in a program of rehabilitation which is reasonably necessary to restore the employee to suitable, substantial and gainful employment, the employee shall receive compensation at the rate provided by § 62-4L3 during the entire period that he is engaged in such program. The employee shall file a claim with his employer requesting such compensation and the employer shall follow the procedure specified in chapter 62-6 for the reporting of injuries when handling such claim. If the claim is denied, the employee may petition for a hearing before the department.

SDCL 62^-5.1.²

[¶ 9.] We have interpreted this statute on numerous occasions and established a five-part test for awarding rehabilitation benefits:

1. The employee must be unable to return to his usual and customary line of employment;

2. Rehabilitation must be necessary to restore the employee to suitable, substantial, and gainful employment;

3. The program of rehabilitation must be a reasonable means of restoring the employee to employment;

4. The employee must file a claim with his employer requesting the benefits; and

5. The employee must actually pursue the reasonable program of rehabilitation.

Hendrix, 520 N.W.2d at 883; Chiolis v. Lage Dev. Co., 512 N.W.2d 158, 160 (S.D.1994); Beckman v. John Morrell & Co., 462 N.W.2d 505, 507 (S.D.1990); Cozine v. Midwest Coast Transp., Inc., 454 N.W.2d 548, 553 (S.D. 1990).

[¶ 10.] 1. Whether Kurtenbach was unable to return to his usual and customary line of employment.

[¶ 11.] The first requirement, Kurten-bach’s inability to return to “his usual and customary line of employment,” is unquestioned. His duties with employer included lifting and repetitive motion, tasks he was no longer capable of performing.

[¶ 12.] 2. Whether rehabilitation is necessary to restore Kurtenbach to suitable, substantial, and gainful employment.

[¶ 13.] The second requirement, whether rehabilitation is necessary, is disputed by Employer. It argues that Kurten-bach’s position was primarily a “sales” job, and that retraining is unnecessary because there are sales jobs available which would restore him to “suitable, substantial, and gainful employment.” Kurtenbach maintains that his personality is not suited for the type of sales jobs Employer suggests, and that Ms job with Employer was not primarily sales-oriented, but limited to servicing and maintaining existing accounts. His vocational expert, William Peniston, agreed that sales only accounted for a minor percentage of Kurten-bach’s daily duties and further noted that he was “financially unsuccessful” in previous straight-commission sales positions.

[¶ 14.] The jobs suggested by Employer’s vocational expert, Ronald Ochs, were straight-commission positions involving the sale of automobiles, vacuum cleaners, and insurance. Ochs conceded at the Department hearing, and in his “Labor Market Survey,” that these positions had a high turnover rate and a dismal success rate. He also testified that only “good” salespeople could be expected to earn at a level comparable to Kurtenbach’s earnings with Employer.

[¶ 15.] “ ‘The statute requires more than mere restoration to employment. The new employment must be suitable when compared to the employee’s former job.’ ” Chiolis, 512 N.W.2d at 160 (quoting Cozine, 454 N.W.2d at 554). We agree with Department that commission sales positions would not return Kurtenbach to suitable, substantial, or gainful employment:

We must distinguish between Claimant’s position with Frito-Lay and the employment suggested by Employer/Insurer. As a Frito-Lay route salesman, Claimant did not have to establish his customer base, but rather, he took over an existing route. It is true that the driver on these routes must service the customers on his route. This consists of being sure the customer’s shelves and displays are well stocked, and that the customer is prepared for his sales. While it is true that the driver encourages the customer to add special displays, this cannot be compared to salesmanship required of a successful auto dealer. One has a captive audience and the other captures. One knows the product and wants to have it available to his consumer. The other must convince the ultimate buyer of the value of the product.

Kurtenbach v. Frito-Lay, SD Dep’t of Labor, Div. of Labor & Management, HF No. 36, 1993/94 (June 1995).

[¶ 16.] Department also pointed out that Peniston did not find Kurtenbach to be suited for commission sales and that his presentation at the hearing proved that he simply did not have the personality traits of an aggressive salesperson. “‘[T]he agency, after holding a hearing and listening to witnesses, is in a much better position to find facts than are we on appeal.’ ” Cox v. Sioux Falls Sch. Dist. No. 19-5, 514 N.W.2d 868, 873 (S.D.1994) (quoting Permann v. South Dakota Dep’t of Labor, 411 N.W.2d 113, 117 (S.D.1987)); accord Abild v. Gateway 2000, Inc., 1996 SD 50, ¶ 9, 547 N.W.2d 556, 559.

[¶ 17.] According to Cozine, before the burden of establishing the existence of suitable employment shifts to the employer, the employee must make a prima facie showing that he is unable to find suitable employment. 454 N.W.2d at 554. Employer claims that one day of telephone calls to inquire about the commission sales jobs, after enrolling at SDSM & T, does not constitute a valid job search. Department stated that ordinarily a job search is critical to establishing a right to rehabilitation benefits, but it is not necessary where a search would be fruitless because the proposed employment “is beyond the individual in terms of success.”

[¶ 18.] In Chiolis, we noted that the claimant’s less than aggressive job search was excusable where the experts agreed he" needed retraining. 512 N.W.2d at 160. Evidence was presented at the Department hearing which shows the experts believed Kurten-bach needed vocational retraining. His neurosurgeon, Dr. James, recommended vocational retraining in March and April of 1992. Even so, Kurtenbach made an unsuccessful attempt to return to work in April. Dr. Anderson suggested retraining after examining him on June 24, 1992, on a referral from the South Dakota Department of Vocational Rehabilitation. After examining him in November, 1992, Dr. Goff, a physiatrist, stated he should not return to his previous job. Peniston concluded that retraining was necessary to restore him to suitable, substantial, and gainful employment. Finally, even Employer’s expert stated, “[S]ome type of retraining may be in order[.]”

[¶ 19.] Ochs testified that the goal in finding suitable employment is a position offering seventy-five to eighty percent of the pre-injury wage. Employer did not meet its burden in establishing the existence of suitable, substantial, and gainful employment without rehabilitation “because it did not present any potential employers who were willing to pay seventy-five to eighty percent of [Kurtenbach’s] prior wage.... Therefore, finding that rehabilitation was necessary to restore [Kurtenbach] to suitable, substantial and gainful employment was correct.” Chiolis, 512 N.W.2d at 160 (citation omitted). In light of all of the above and our review of the record, Department was not clearly erroneous in finding that Kurten-bach met his burden in showing that rehabilitation was necessary to restore him to suitable, substantial and gainful employment.

[¶ 20.] S. Whether the program of rehabilitation is a reasonable means of restoring Kurtenbach to employment.

[¶21.] Employer disputes the reasonableness of Kurtenbach’s five and one-half year metallurgical engineering program, claiming the program chosen by Kurtenbach will not restore him to suitable, substantial, and gainful employment because no employment opportunities in that field exist in Kur-tenbach’s community. Kurtenbach contends that his willingness to relocate and the record evidence establishing at least twenty-one metallurgical engineering opportunities nationwide make his chosen rehabilitation program reasonable.

[¶ 22.] The purpose of rehabilitation benefits is to restore an injured employee to suitable, substantial, and gainful employment. Hendrix, 520 N.W.2d at 883; Chiolis, 512 N.W.2d at 161; Beckman, 462 N.W.2d at 508; Cozine, 454 N.W.2d at 554. A program of rehabilitation which does not accomplish this purpose is not reasonable. See Barkdull v. Homestake Mining Co., 411 N.W.2d 408, 410 (S.D.1987). The claimant bears the burden of establishing the reasonableness of a program of rehabilitation. Chiolis, 512 N.W.2d at 161.

[¶ 23.] A determination of whether a program of rehabilitation is reasonable necessarily requires an evaluation of the employment prospects for the claimant upon completion of the program. See Jane M. Draper, Workers’ Compensation: Vocational Rehabilitation Statutes, 67 A.L.R.4& 612, 628-29 (1989). Employment prospects and the availability of suitable, substantial and gainful employment are evaluated in light of the claimant’s community. Bonnett v. Custer Lumber Corp., 528 N.W.2d 393, 395 (S.D. 1995); Hendrix, 520 N.W.2d at 883; Petersen v. Hinky Dinky, 515 N.W.2d 226, 231 (S.D.1994); Shepherd v. Moorman Mfr’g, 467 (S.D.1991); Rank v. Lindblom, 459 N.W.2d 247, 249 (S.D.1990). An employer cannot rely on employment opportunities which would unreasonably require a claimant to relocate in order to defeat a claim for rehabilitation benefits. See Rank, 459 N.W.2d at 249. “The test is more restrictive. The focus is on employment in the community where the claimant is already residing.” Id. Similarly, a claimant is not entitled to use job opportunities outside his community to establish the reasonableness of a program of rehabilitation. Both employer and claimant are confined to the claimant’s community for purposes of establishing whether a program is reasonable.

[¶ 24.] Kurtenbach contends his program of rehabilitation is reasonable because it restores him to at least 75% of his pre-injuiy wage of $40,000 per year. Kurtenbach, however, has not shown that the metallurgical engineering program will restore him to suitable employment in his community.3 His own expert, Peniston, stated there was no information concerning the availability of employment opportunities in Kurtenbach’s community upon completion of the program. Pe-niston stated: “I’m assuming he’s probably going to have to relocate after he retrains.” The record indicates as few as twenty-one jobs exist for metallurgical engineers nationwide, none of which are located in Kurten-baeh’s community.⁴ The program of rehabilitation Kurtenbach chose to pursue does not restore him to suitable employment in his community, or even in this state, and his willingness to relocate does not change this.⁵

[¶ 25.] A claimant may enroll in a rehabilitation program without the consent of the employer, but he does so at his own risk; that is, rehabilitation benefits will not be guaranteed for a particular program simply because the program is one a claimant wishes to pursue. The five requirements for rehabilitation benefits must be met before benefits will be awarded for a program of rehabilitation. Hendrix, 520 N.W.2d at 883. The highly specialized program of rehabilitation unilaterally selected by Kurtenbach does not restore him to suitable, substantial and gainful employment "in his community. Rather, the program improperly elevates Kurten-bach’s station in life at the expense of Employer. See Chiolis, 512 N.W.2d at 161; Barkdull, 411 N.W.2d at 410. His chosen metallurgical engineering specialty program is not reasonable. Because the program does not meet all the requirements for rehabilitation benefits, Department’s award of rehabilitation benefits is reversed.

[¶ 26.] Our reversal of Department’s award of rehabilitation benefits for Kurtenbach’s metallurgical engineering program should not be construed as a complete denial of rehabilitation benefits. Kurtenbach is free to propose a different program of rehabilitation. If the program meets the five requirements, he is entitled to receive rehabilitation benefits. See Hendrix, 520 N.W.2d at 883.

[¶ 27.] The denial of rehabilitation benefits for the metallurgical engineering program is dispositive of whether Kurtenbach’s claim for the benefits was defeated by enrolling before petitioning the Department.

[¶28.] II. Whether Kurtenbach is entitled to Cozine benefits.

[¶ 29.] Kurtenbach raised, by notice of review, the issue of whether Department erred by not awarding him Cozine benefits. Cozine benefits are those which are paid to a claimant for the loss of a part of the body or its loss of use. See Cozine, 454 N.W.2d at 551-52; SDCL 62-4-6. It is the responsibility of Department to determine a claimant’s loss of use. Tischler v. UPS, 1996 SD 98, ¶ 53, 552 N.W.2d 597, 607; SDCL 62-4-6. “SDCL 62-4-6 specifies the amount of compensation an employee shall receive for the loss of a part of the body or its loss of use. The clear language of this statute directs that compensation shall be paid for loss of use. Consequently, the hearing examiner must determine if, and to what extent, a claimant has suffered the loss of use of a part of the body.” Cozine, 454 N.W.2d at 551-52.

[¶ 30.] Kurtenbach claims Department erred in denying his request for Cozine benefits in addition to rehabilitation benefits. We have concluded Department’s award of benefits for the metallurgical engineering program was in error. The record, however, is void of any indication that Department ever assigned Kurtenbach a loss-of-use disability rating. Department is required to assign him a loss-of-use rating, and has not properly fulfilled its statutory duty. SDCL 62-4-6. Therefore, we remand for a determination of Kurtenbach’s loss of use.

[¶ 31.] We reverse Department’s award of rehabilitation benefits for the metallurgical engineering program and remand for a determination of Kurtenbach’s loss-of-use disability rating and consideration of any program of rehabilitation which Kurtenbach might propose.

[¶ 32.] AMUNDSON and GILBERTSON, JJ., concur. [¶ 33.] SABERS and KONENKAMP, JJ., dissent in part and concur in part. [¶ 34.] SABERS, J., dissents in part and concurs in part.

1 . Metallurgical engineering concerns "the extraction of metals from their ores, refining them, and preparing them for use and includes processes (as alloying, rolling, and heat-treating) and the study of the structure and properties of metals.” Webster's Third Int’l Dictionary 1420 (1976).

2 . This statute was amended in 1994. This amendment does not apply to Kurtenbach's claim for rehabilitation benefits.

3 . We respectfully submit the minority has misread our holding in this regard. We are not requiring that a claimant must prove an actual suitable employment opportunity, but rather that suitable employment must be available in a claimant’s community. This requirement is supported by our line of cases in this area. Bonnett v. Custer Lumber Corp., 528 N.W.2d 393, 395 (S.D.1995); Hendrix v. Graham Tire Co., 520 N.W.2d 876, 883 (S.D.1994); Shepherd v. Moor-man Mfr'g., 467 N.W.2d 916, 920 (S.D.1991); Rank v. Lindblom, 459 N.W.2d 247, 249 (S.D. 1990).

4 . The minority makes much of the fourteen entities in the Black Hills area which reportedly hire engineers according to information from the South Dakota Department of Environment & Natural Resources. This report and the statistics relied on by the minority are not part of the settled record presented for our review. It is not an appropriate function of the judiciary to advance an argument on behalf of a party who has overlooked evidence or failed to meet his burden. The minority inappropriately supplements the record where Kurtenbach has failed in order to achieve a desired result. See Wooster v. Wooster, 399 N.W.2d 330, 332 (S.D.1987) (noting judicial review is limited to the record and matters appropriate for judicial notice).

5 .The minority contends Kurtenbach “never asserted a desire, a ‘willingness,’ or a need to leave the Black Hills to secure employment.” This statement is not supported by the record. Department specifically noted "Kurtenbach has voiced no objection to relocation." Kurten-bach’s experts assumed relocation was required and testified as to the availability of employment opportunities for metallurgical engineers based on relocation. Additionally, the only employment statistics presented by Kurtenbach were for nationwide opportunities, none of which were located in South Dakota. Clearly, Kurtenbach was not opposed to relocation and, in fact, advocated relocation through the evidence he presented to Department.